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A New Approach to Estimating Damages in Mass Torts

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  • Atanu Saha
  • Lynette Hilton

Abstract

Damage estimation in mass torts involving hazardous or defective products is often complicated by the unknown time-profile of disease incidence or failure rate. Because these cases involve diseases with long latencies or involve products that fail after years of productive use, estimation of the defendants' future liability stream requires a model that can predict how the failure rate or the onset of the disease will change over time.This paper proposes such a model. The estimation technique allows one to compute the 'excess risk' attributable to the hazard or product defect distinct from the natural causes of failure or disease incidence and to calculate the defendants' future liability stream based on the estimates of failure or incidence rates. An application to product failure illustrates the working of the model.

Suggested Citation

  • Atanu Saha & Lynette Hilton, 2000. "A New Approach to Estimating Damages in Mass Torts," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 7(1), pages 27-46.
    • Handle: RePEc:taf:ijecbs:v:7:y:2000:i:1:p:27-46
    DOI: 10.1080/13571510084041
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    References listed on IDEAS

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    1. Bandopadhyaya, Arindam, 1994. "An Estimation of the Hazard Rate of Firms under Chapter 11 Protection," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 346-350, May.
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    4. Timothy J. Gronberg & W. Robert Reed, 1994. "Estimating Workers' Marginal Willingness to Pay for Job Attributes Using Duration Data," Journal of Human Resources, University of Wisconsin Press, vol. 29(3), pages 911-931.
    5. Donald Haurin, 1988. "The Duration of Marketing Time of Residential Housing," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 16(4), pages 396-410, December.
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    7. Lancaster, Tony, 1979. "Econometric Methods for the Duration of Unemployment," Econometrica, Econometric Society, vol. 47(4), pages 939-956, July.
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    Cited by:

    1. Saralees Nadarajah & Samuel Kotz, 2006. "On the New Model for Estimating Damages in Mass Torts - A Note," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 13(3), pages 461-462.

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